Sales Performance Doesn't Make Dean's List

He shooed aside worries about increasing supply, a softening market, import share decline and a host of dealer woes and said time should prove that Geo will make the grade.

''I guess I'd give it a B-plus,'' said Michael H. Erdman, Chevrolet general marketing manager, reflecting on the import franchise's first few months as a separate marketing entity.

Despite Erdman's assessment, others are not so sure of Geo's dean's-list potential halfway through its first model year. Christopher Cedergren, a market analyst for J.D. Power and Associates of Agoura, Hills, Calif., said that despite Chevrolet's move to break out its captive imports under a separate franchise, sales are slow.

''If you look at the sales performance, it isn't what you would call spectacular. Vehicles sold under the same nameplate are down 20 percent,'' Cedergren said.

For the 1989 model year, the decline is greater. Geo sales totaled 64,444 for the model year through March 20, down 36.31 percent from 101,189 a year earlier for models that now make up the Geo line.

Other problems facing Geo are soaring supply, slipping import share in the hotly contested California market, the threat of rising interest rates and growing inflation, a struggle to establish a national

presence and a dealer body clamoring for an expanded product lineup.

The Geo franchise is Chevrolet's marketing answer to a growing import market. Erdman said that with foreign cars (including transplants) taking 35 percent of U.S. sales, and import buyers unlikely to come to Chevrolet showrooms, Geo was conceived to attract those buyers. The plan has yet to bear fruit.

Auto analyst Michael M. Luckey of the Luckey Consulting Group, Old Tappan, N.J., agreed with Cedergren's assessment of Geo and said its success rests with the market's overall economic health.

''I would give Geo a B-minus or C-plus,'' Luckey said. ''There are two real factors why it's not doing as well as it should be doing. The first is that Prizm is too new to get a handle on sales performance. More important, the lower end of the market has undergone a considerable weakening, more so than the market as a whole.''

Luckey said the demographic profile of entry-level buyers is such that they're the first group to be affected by a weakening economy's rising interest rates. He also said a tightening of credit requirements among lending institutions already has disqualified many entry-level vehicle buyers.

One early indicator of Geo's sales is its burgeoning inventory. On March 1, Geo Prizm/Nova recorded a 180-day supply, compared with a 58-day supply on the same date a year earlier.

Chevy's imports - Spectrum, Sprint and Metro - posted a 188-day supply compared with 140 days in 1988. The recently introduced Geo Tracker, a sport-utility vehicle built by Suzuki, had a 198-day supply on March 1.

By contrast, Chevrolet's domestic models averaged an 87-day supply on March 1.

But Erdman said those supply figures might not be an appropriate gauge of Geo's success. He said it is likely they are inflated since Geo is undergoing a staggered product introduction in 22 selected import-heavy markets across the country. Geo's national rollout to its 4,100 dealers will be complete by fall.

Sale success also is measured in market share. And in California, an import stronghold, Chevrolet's imports are not doing well.

Using R.L. Polk Co. registration figures, J.D. Power said General Motors is losing share in California, though its total registrations increased 5 percent in 1988.

Leading the decline is Chevrolet's Geo line. Geo registrations in California for calendar 1987 totaled 32,308. In 1988, that figure fell to 20,885, for a 35.36 percent loss.

Power's Cedergren attributed the slow launch to Geo's marketing approach. ''I think the problem was that they weren't as aggressive as they should have been. GM should look upon Geo as a completely new auto company starting up in the U.S., which means blanketing the media with advertising.

''They really are going to have to make the Geo nameplate recognizable to the consumer,'' Cedergren said.